Chart House v. PlamettoClub ( 2004 )

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

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Chart House, Inc., a Delaware Corporation, Appellant,

v.

Palmetto Bay Club Owners’ Association, Inc., a/k/a Palmetto Bay Club HPR; Palmetto Bay Horizontal Property Regime; Cross Island Associates, LLC; W.G. Shuckers, Inc.; Brighton Bay Associates, LP; and the Yacht Club of Hilton Head Island,        Defendants,

of whom Palmetto Bay Club Owners’ Association, a/k/a Palmetto Bay Club HPR is        Respondent.

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Appeal From Beaufort County
Jackson V. Gregory, Circuit Court Judge
Gerald C. Smoak, Circuit Court Judge

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Unpublished Opinion No. 2004-UP-634
Heard October 13, 2004 – Filed December 15, 2004

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REVERSED

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James B. Richardson, Jr., of Columbia, for Appellant.

Otto W. Ferrene, of Hilton Head, for Respondent.

HEARN, C.J.:  Chart House, Inc., appeals an order of the circuit court granting summary judgment to Palmetto Bay Club Owners’ Association, a/k/a Palmetto Bay Club HPR (“Palmetto Bay Club”) and dismissing Palmetto Bay Club from the case.  We reverse.

FACTS

On November 1, 1978, CHE, Inc., entered into a twenty-five year ground lease for the Chart House Restaurant property at Palmetto Bay Marina on Hilton Head Island.  The Appellant, Chart House, Inc., is CHE’s successor in interest.  Palmetto Bay Marina, a partnership entity, was the lessor of the property at that time.  The ground lease granted a leasehold interest in the Chart House property, “together with all present and future improvements, Lessor’s easements, rights of way, servitudes and appurtenances in adjoining and adjacent land . . . .”  This lease was never recorded. 

Prior to 1982, Palmetto Bay Marina owned the entire marina area.  Palmetto Bay Marina split into two separate partnerships known as Marina Development Associates and Palmetto Bay Associates.  On October 5, 1982, Palmetto Bay Marina conveyed a portion of the real property adjacent to the Chart House tract, including the parcel now owned by Palmetto Bay Club, to Marina Development.  Palmetto Bay Marina assigned the parcel leased to Chart House to Palmetto Bay Associates. 

On October 8, 1982, Marina Development and Palmetto Bay Associates granted each other, by means of a cross easement agreement, reciprocal easements for ingress, egress, and parking in the area between the two properties.  This easement was to run with the title to the Chart House property.  Chart House joined in the agreement “for the sole purpose of consenting to the easements, rights and privileges granted pursuant [to the agreement] to the extent such easements, rights and privileges affect[ed] the Chart House property.”  This document was subsequently recorded. 

On the same date, Chart House entered into a “First Amendment and Modification” agreement (“Amended Agreement”) with Palmetto Bay Associates, its new lessor.  The Amended Agreement referenced both the ground lease and the cross easement agreement, and purported to “amend and modify” the ground lease.  The parties also executed and recorded a “Memorandum of Lease,” which referenced the original ground lease.  The Amended Agreement substituted Palmetto Bay Associates for Palmetto Bay Marina as lessor.  In addition, the Amended Agreement contained a section entitled “Substitution of Property,” which described the leased premises,  substituting “Exhibit A” of the Amended Agreement for “Exhibit A” of the ground lease.  This section also contained a release clause providing that “CHE hereby acknowledges and agrees that it shall from and after the date hereof have no rights whatsoever in and to any real property under the Lease except for the Property described in the attached Exhibit “A.” 

At issue is the scope of the effect of the release clause.  Chart House contends, and Palmetto Bay Club does not deny, that the substitution of property was necessary to conform the ground lease’s description of the premises to the redrawn property lines as a result of the conveyance from Palmetto Bay Marina to Marina Development.  Therefore, Chart House argues that the above-referenced language was intended only as a release of all claims of interest to the real property under the ground lease.  Palmetto Bay Club’s contention is that this language modified not only the ground lease, but the cross easement agreement as well, so as to divest Chart House of any interest in the ingress/egress and parking easement over the Marina Development property.

On March 28, 2001, Chart House filed suit naming several defendants, including Palmetto Bay Club.  The complaint alleged causes of action for (1) nuisance, (2) breach of covenants, and (3) trespass based on Chart House’s rights under both the ground lease, as modified by the Amended Agreement, and the cross easement agreement.  The causes of action for nuisance and trespass dealt with parking and named all the defendants. However, the cause of action for breach of covenant not to compete named only Cross Island Associates, LLC, and its lessee, W.G. Shuckers, Inc., and alleged a breach of the covenant not to compete between Chart House and Palmetto Bay Marina contained in the ground lease, which prohibited Palmetto Bay Marina or its successors from engaging in the restaurant business. 

Both Cross Island and Palmetto Bay Club subsequently moved for partial summary judgment on five nearly identical grounds, all of which went to the enforceability of the ground lease. Palmetto Bay Club’s motion also contained a sixth ground, as follows: “That a finding that any of the above are decided in favor of the movant, result [sic] in an order dismissing the movant from the first, second and third causes of action.”  Both motions were argued together at Palmetto Bay Club’s request. At the hearing, counsel for Cross Island specified that its motion was directed solely at the covenant not to compete contained in the ground lease and the effect of the Amended Agreement on the lease.  The trial court granted summary judgment to both Cross Island and Palmetto Bay Club on the breach of the covenant not to compete claim.  The court also dismissed both defendants from the action, holding that the release language in the Amended Agreement quoted above operated to divest Chart House of any interest in any property other than its leasehold.

Chart House filed a timely motion to reconsider, which was denied by Judge Gregory. [1]   Chart House appealed from the order granting summary judgment to Palmetto Bay Club. 

STANDARD OF REVIEW

“Summary judgment is appropriate when it is clear there is no genuine issue of material fact and the conclusions and inferences to be drawn from the facts are undisputed.”  McClanahan v. Richland County Council, 350 S.C. 433, 437, 567 S.E.2d 240, 242 (2002) (citation omitted).  Additionally, in ruling on a motion for summary judgment, a reviewing court must view the evidence in the light most favorable to the non-moving party. Id. at 438, 567 S.E.2d at 242.  Summary judgment is a drastic remedy. Therefore, it “should be cautiously invoked so that a litigant will not be improperly deprived of trial on disputed factual issues.”  Cunningham ex rel. Grice v. Helping Hands, Inc., 352 S.C. 485, 491, 575 S.E.2d 549, 552 (2003) (citation omitted).

LAW/ANALYSIS

Chart House argues that the trial court violated its due process rights in granting summary judgment to Palmetto Bay Club based on grounds not pled in its motion.  We agree.

“It is an error of law for a court to decide a case on a ground not before it.”  Griffin v. Capital Cash, 310 S.C. 288, 294, 423 S.E.2d 143, 147 (Ct. App. 1992) (citation omitted). “Due process requires that a litigant be placed on notice of the issues which the court is to consider.”  Bass v. Bass, 272 S.C. 177, 180, 249 S.E.2d 905, 906 (1978).  “One of the basic purposes of a notice of motion is to apprise the opposing party of the relief sought and the grounds therefore.”  Turbeville v. Floyd, 288 S.C. 171, 174, 341 S.E.2d 651, 652 (Ct. App. 1986) (quoting Skinner v. Skinner, 257 S.C. 544, 549, 186 S.E.2d 523, 526 (1972)). Thus, a court ordinarily may not grant relief beyond the scope of the notice. Id.  A limited exception to this rule exists when a ground not included in the notice of the motion is nevertheless fully argued before the court without objection.  See Salvo v. Hewitt, Coleman & Assocs., 274 S.C. 34, 39, 260 S.E.2d 708, 711 (1979).

In the instant case, Palmetto Bay Club moved for summary judgment on grounds substantially similar to those in Cross Island’s motion, and requested that the motions be argued together. At the beginning of the hearing, Cross Island made it very clear that its argument was limited to the breach of covenant issue in Chart House’s second cause of action.  Neither in the notice of motion nor during the hearing did Palmetto Bay Club apprise Chart House that it was arguing the parking easement issue. All of the grounds listed in the notice of motion went to the enforceability of the ground lease.  Palmetto Bay Club did include an averment in its notice requesting that a finding in its favor result in its release on all three causes of action.  However, this vague request did not in any way place Chart House on notice of its theory that one provision in the amended lease agreement effectively nullified a separate agreement Chart House executed that same day with different parties.  In other words, although Palmetto Bay Club’s notice of motion was sufficient to apprise Chart House of the “relief sought,” it failed to sufficiently allege the “grounds therefore.”  See Turbeville, 288 S.C. at 174, 341 S.E.2d at 652. 

Because summary judgment was granted on grounds that were not included in the motion and were not fully argued at the hearing, we hold that the trial court erred in granting summary judgment and dismissing Palmetto Bay Club from the case.  Accordingly, the order of the trial court is

REVERSED and REMANDED. [2]

HUFF and KITTREDGE, JJ., concur.

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[1] The trial judge, Judge Gerald C. Smoak, Sr., retired subsequent to the trial and was replaced by Judge Jackson V. Gregory. 

[2] We decline to address Chart House’s remaining issues on appeal. See Futch v. McAllister Towing of Georgetown, Inc., 335 S.C. 598, 613, 518 S.E.2d 591, 598 (1999) (finding that an appellate court need not address remaining issues when disposition of prior issue is dispositive).